The final rule regarding accountable care organizations (ACOs) may be published, but the final word on how dermatologists can best participate in these new entities has yet to be written.

ACOs are patient-centric entities that create incentives for health care providers to coordinate care, in this case for Medicare beneficiaries, across settings. ACOs that lower costs while meeting quality measures will be financially rewarded through the Shared Savings Program. Medicare could potentially save up to $960 million the first three years, which is the length of the ACO agreements. The final rule released by the Centers for Medicare and Medicaid Services (CMS) on Oct. 20, 2011 has made it easier and less risky for physicians to participate in an ACO than it would have been under the proposed rule released last summer.

“All of the changes, by and large, were designed to make this program more attractive,” said George Roman, senior director of health policy for the Alexandria, Va.-based American Medical Group Association. Typically, changes in rulemaking from the proposed to final rule are not what he would characterize as significant. But the final rule made it less risky and less burdensome for physicians to participate in ACOs and offered them more incentive to do so. See sidebar for a summary of changes from the proposed rule to the final rule; see this month’s Legally Speaking column for more on how antitrust regulations are being relaxed to allow ACOs to function and other background.

Participation options

With ACO formation starting this year, dermatologists should keep their ear to the ground to find out who is forming ACOs in their communities. Large integrated delivery systems (IDSs), independent physician associations (IPAs), multispecialty practices, and even hospitals are potential candidates for forming ACOs. A large IDS has the kind of comprehensive data regarding services and costs for coordinated care that is necessary to succeed as an ACO, noted Karen Edison, MD, who served on the AAD’s ACO Workgroup. An IPA offers physicians flexibility to practice independently and work together with other physicians to manage a population of patients in a coordinated way, noted Harold Miller, executive director of the Pittsburgh-based Center for Healthcare Quality and Payment Reform. Even now IPAs comprising primary care physicians (PCPs) and specialists are working together and managing global payment capitation quite successfully without hospital involvement, he noted.[pagebreak]

An ACO must maintain good working relationships with specialists to avoid overlaps and gaps in care, as well as achieve the best outcomes for patients. “It would be hard for an ACO to achieve maximum potential unless it has primary care at the core,” Miller said. “Many argue it would be hard for an ACO to be successful without specialty physicians being engaged in some fashion.”

Dermatologists can participate in an ACO by becoming a member of a large multispecialty or specialty group, contracting with an existing ACO, gaining employment in a hospital that joins or forms an ACO, or joining a network of individual practices to form an ACO. An ACO with a high rate of dermatology referrals may want to hire a dermatologist to reduce or control its costs.

But dermatologists do not have to be a part of the ACO itself. For example, they can develop a contractual arrangement with an IPA or a large primary care practice-turned-ACO. Additionally, not all multispecialty groups employ all types of specialists, requiring them to develop relationships with some outside of the group.

Choosing the one

Whichever entities form ACOs will be based on the realities of the marketplace, Roman said. That is why dermatologists should become familiar with the practice realities in their respective marketplace. What is the competitive landscape? Who are the payers? What are their referral patterns? “Choosing with whom to align will flow from these realities,” he said.

Referral networks are a key factor in deciding with whom to align formally or informally, Dr. Edison noted. Such physicians may include PCPs; other dermatologists; Mohs surgeons; plastic surgeons; oncologists; and ear, nose, and throat specialists. Pay attention to this on an organizational basis, as well, she recommended.

“Start to have conversations with other physicians in your community about the possibility of working together to better manage a population of patients,” Miller added.

Look for a group of physicians across specialties who want to improve quality, patient safety, and cost effectiveness because that’s where the value is driven that creates the opportunity to earn additional payment to physicians for their work, stressed Mark Shields, MD, MBA, senior medical director of Mt. Prospect, Ill.-based Advocate Physician Partners, which signed its first commercial ACO contract Jan. 1, 2011. “It’s all about finding that group committed to the right culture in a local setting.”[pagebreak]

Additionally, dermatologists should learn about the different payment models, not just the SSP model offered by Medicare, Miller said. Under Medicare, dermatologists will be paid fee-for-service with the Shared Savings Program payment kicking in only if savings are realized. Other ACOs have different payment models that may be more appealing to dermatologists. “Keep in mind that Medicare patients may be a small subset of your patient population. Do you want to change your practice structure based on a payment change for a subset of patients or do you want to be able to have an organizational mechanism that will allow you to work with other physicians to care for this subset of patients?” he asked. “If you keep your foot in both camps, as the payment system evolves you can shift into a more coordinated structure.”

Dan McCoy, MD, former chair of the council on legislation for the Texas Medical Association, concurred. “At this point, there is no reason for dermatologists to jump ship from their current practice into a new employment model just to join an ACO,” he said. Consider the fact that the key to ACO success is creating value for the patient and the health system. Since the largest determinant of cost savings and therefore value improvement as perceived by many hospitals — is inpatient care, there may not be much incentive for these types of groups to favor dermatologists, he said. In contrast, single-specialty ACOs or multispecialty groups may shine a better light on the value that dermatologists can add in early diagnosis and more successful management of skin disease. “To date, there are very few ACOs that will offer a return’ to the physician and fewer still that would reward a dermatologist,” he said, “so careful selection is paramount.”

Dermatologists should also be aware that some ACOs may opt to hire one dermatologist to manage a group of mid-level providers as this will potentially lower costs, Dr. McCoy warned. Dermatologists need to be prepared to show that they are an essential player in improving quality and outcomes and that the entire care of dermatologic patients cannot be delegated to mid-level providers.[pagebreak]

Unlike PCPs, specialists have the option of joining more than one ACO. Whether dermatologists should do so is up for debate. Given that creating better outcomes and value is a key to ACO success, joining more than one may hinder the dermatologist’s ability to deliver quality care, Dr. McCoy said. Although Dr. Shields believes that the decision is highly dependent on local circumstances, he noted that having a very close relationship with PCPs in one ACO is more important to delivering value than having mediocre relationships with PCPs in more than one. On the other hand, dermatologists will likely have patients belonging to multiple ACOs, especially in larger markets, and working with more than one will allow them to provide better care for all of those patients, Miller said.

The potential future consequences of not participating include possibilities that dermatologists will have to consider as they think through their options. “You may be left out if payment mechanisms are truly redesigned to reward quality and value,” Dr. McCoy said. “And if you haven’t joined and put systems in place to document your quality of care, then you might find it difficult to be accepted into successful ACOs.” While ACOs are focused on primary care now, many policymakers predict that this type of payment reform will spread to specialty care, Dr. Edison added. Indeed, Ezekiel Emanuel, MD, PhD, a former health policy advisor in the Obama administration, recently suggested in a New York Times editorial that ACOs would supplant health insurers as the dominant coordinators of patient care by the end of the decade. “Who knows how long dermatologists will continue to be paid fee-for-service at this level?” Dr. Edison said. “At some point, dermatologists who don’t join an ACO may risk being left behind as provider payment reform rolls out.”

Attracting ACOs

Once you have decided to join and/or contract with an ACO, how can you set yourself apart from others?

“Dermatologists should think about opportunities to change the way care is being delivered that maintains or improves quality for patients and reduces costs for the payer,” said Harold Miller, executive director of the Pittsburgh-based Center for Healthcare Quality and Payment Reform. “There’s no standard formula for that. It has to be done specialty by specialty.” One way to determine those opportunities is to talk with PCPs to better identify subsets of patients who would most benefit from dermatologic care. Among those patient populations would be patients at risk for melanoma as well as those with eczema and psoriasis.

“Dermatologists should think about ways they can produce value, meaning enhancing the quality of patient experience, safety, or cost effectiveness, and how they can deliver those by themselves or in collaboration with other physicians,” added Mark Shields, MD, MBA, senior medical director of Mt. Prospect, Ill.-based Advocate Physician Partners. Be sure to share those ideas with PCPs and other specialists, he said.

In addition to evaluating dermatologic care with “the value proposition in mind,” working more closely with physician colleagues than in the past is a must, said Karen Edison, MD, who served on the AAD’s ACO Workgroup. Along those lines, see referred patients in a timely fashion and provide prompt clear communication back to the referring provider. In addition, be willing to see referred patients regardless of payment source and do hospital consults when asked if not in person, then via teledermatology or reviewing high-quality digital photographs. Dermatologists may also want to think about how to help with preventive health care, such as asking patients if they have a PCP, checking blood pressure in the clinic, and even asking if patients have had their flu shot, she said.

Although most of the quality measures to be reported by ACO participants focus on primary care, dermatologists should become familiar with them to ensure that they understand the measures that relate, Dr. Edison said. Several measures addressing patient satisfaction, such as obtaining timely appointments, communicating effectively, providing access to specialists, and participating in shared decision-making are applicable to dermatologists. Medication reconciliation and qualifying for an EHR incentive payment are two measures that could apply to dermatologists.

“By doing these things,” Dr. Edison concluded, “you will be viewed as part of the care team.”

Changes to ACO rule make participation easier, more rewarding

Proposed rule

Final rule

ACOs in lower-risk track only share in savings above 2 percent

All ACOs share in first-dollar savings

Reporting of 65 quality measures in five domains required from outset

Reporting of 33 quality measures in four domains required; phased in during ACO agreement period

Once you have decided to join and/or contract with an ACO, how can you set yourself apart from others?

“Dermatologists should think about opportunities to change the way care is being delivered that maintains or improves quality for patients and reduces costs for the payer,” said Harold Miller, executive director of the Pittsburgh-based Center for Healthcare Quality and Payment Reform. “There’s no standard formula for that. It has to be done specialty by specialty.” One way to determine those opportunities is to talk with PCPs to better identify subsets of patients who would most benefit from dermatologic care. Among those patient populations would be patients at risk for melanoma as well as those with eczema and psoriasis.

“Dermatologists should think about ways they can produce value, meaning enhancing the quality of patient experience, safety, or cost effectiveness, and how they can deliver those by themselves or in collaboration with other physicians,” added Mark Shields, MD, MBA, senior medical director of Mt. Prospect, Ill.-based Advocate Physician Partners. Be sure to share those ideas with PCPs and other specialists, he said.

In addition to evaluating dermatologic care with “the value proposition in mind,” working more closely with physician colleagues than in the past is a must, said Karen Edison, MD, who served on the AAD’s ACO Workgroup. Along those lines, see referred patients in a timely fashion and provide prompt clear communication back to the referring provider. In addition, be willing to see referred patients regardless of payment source and do hospital consults when asked if not in person, then via teledermatology or reviewing high-quality digital photographs. Dermatologists may also want to think about how to help with preventive health care, such as asking patients if they have a PCP, checking blood pressure in the clinic, and even asking if patients have had their flu shot, she said.

Although most of the quality measures to be reported by ACO participants focus on primary care, dermatologists should become familiar with them to ensure that they understand the measures that relate, Dr. Edison said. Several measures addressing patient satisfaction, such as obtaining timely appointments, communicating effectively, providing access to specialists, and participating in shared decision-making are applicable to dermatologists. Medication reconciliation and qualifying for an EHR incentive payment are two measures that could apply to dermatologists.

“By doing these things,” Dr. Edison concluded, “you will be viewed as part of the care team.”